Trust Between Seller and Client Must Be Mutual

Would you like your clients to trust you? Presumably you would. And in order to trust you, they must feel that trusting you is a low-risk proposition. They must feel you are trustworthy. Most firms get that.

So, most firms go about trying to appear trustworthy. (The better ones, of course, actually try to be trustworthy, since trust is a hard thing to fake.) This often translates into things such as values statements, corporate social responsibility, efforts at transparency, and programs to enhance customer focus.

All of that is well and good, but those efforts are missing a critical element. Because if all you focus on is trustworthiness—cosmetic or real—then you are forcing your client to take all the risks. And if your client is the one always taking the risks, after a while your client will notice and say, “Wait a minute. I appreciate all of the Boy Scout virtues and so forth, but I notice you never take any risks. And that’s not fair. And so I don’t think I trust you.”

You can be trustworthy to the max, but if you never trust your client, then before too long, your client won’t trust you. And as goes their trust, so goes their business with you.

Trust Is Reciprocally Risky

“The fastest way to make a man trustworthy is to trust him.” That statement is credited to President Franklin D. Roosevelt’s Secretary of State, Henry Stimson, and he expressed a powerful concept: trust is a reciprocating exercise in risk-taking. First one party takes a risk, and the other reciprocates. Then the roles reverse, and the exercise is repeated.

Take the simplest of all trust gestures: the handshake. Smiling I extend my hand to you and say hello, signifying good intentions. You almost certainly return my handshake, smile, and greeting. But you don’t have to.

You could, after all, spurn my gesture, refuse to extend your hand, frown, and turn away from me. I would feel embarrassed, upset, and dismissed. And that would be the end of our budding trust relationship. You probably wouldn’t do that, though. Instead, you would meet my risk-taking gesture with trustworthiness, and our relationship would be off to the races.

Corporate Risk Mitigation

This is not an exercise in corporate anthropology. Think about the context in which you hear “risk” in modern-day business. It is almost always in a negative sense.

Risk is seen mainly as something to be mitigated. Post 2008, financial institutions have laid off layers of employees—except in risk management. The contracting process in nearly all companies has added layers of risk indemnification to its documentation. Lawyers are on hand to ensure not just compliance, but even the appearance of anything that could be considered risky. Insurance businesses are inventing new products to mitigate risk in contracts of all sorts. The last few decades have seen the creation of risk management institutes and certificates in risk management programs.

Despite the protestation that some risk is good (think “risk appetite” or “calculated risk” in the financial world), the emphasis is overwhelmingly on the “calculated” part, not the “risk” part. And once one gets outside of the financial world, it’s hard to find examples of thinking that suggest risk is good.

Execution Risk and Dereliction Risk

The management world is obsessed with avoiding execution risk—the risk of doing the wrong thing. Unfortunately, it makes a pact with the trust devil when it embraces dereliction risk—the risk of not doing the right thing.

We want lifeguards to eschew dereliction risk. If they think someone is drowning, we don’t want them second-guessing themselves. We want them in the water immediately. In basketball, Kobe Bryant is the NBA’s leader in most missed shots. He would rather shoot 4 for 20 than 2 for 5. Another athlete, hockey great Wayne Gretzky, says you’ll never miss a shot you never take—but neither will you make any shots. In all of those cases, they understand the importance of taking execution risks and avoiding dereliction risk.

Yet in business, we are afraid of a hundred execution risks. We fear having the wrong answer, giving offense, looking ignorant, looking foolish, or speaking out of turn. So, we do nothing. And because of our penchant for avoiding execution risk, we absorb dereliction risk, which guarantees failure in the long run.

Trustworthy but Untrusting Does Not Compute

You may be proud of your organization’s record on trustworthiness. But ask yourself these questions to see if you may have some work to do on trusting:

  • Do you have onerous non-compete clauses for your employees?
  • Do your sales pitches hedge their bets or lead with strong hypotheses?
  • Do you make your subcontractors insure you against general liability with no limits?
  • Do your salespeople refuse to answer direct questions about price?
  • Do you ever admit you don’t know something when asked a straight question?
  • Do you insist on client non-disclosure agreements (NDAs) beyond your industry’s norm?
  • How many ex-employee lawsuits has your firm been involved in in the past five years?
  • Are your tardy account collections handled by accounting or by account managers?
  • Would you ever recommend a competitor to a client if the competitor were clearly the better candidate for the job?
  • Do you use lie detector tests for employees?
  • Do you encourage your salespeople to comment on their own and others’ feelings?
  • Do you share your cost information with clients?
  • Do you share your supply-chain information with suppliers or clients/customers?
  • How many paragraphs of fine print are in your client agreements? And how fine is the print?
  • Are your standard client agreements longer or shorter than your biggest competitor’s?
  • How do you handle overruns by you with your clients? How do you handle overruns by your suppliers with you? Which is more onerous?

You can be as trustworthy as a Boy Scout, but if you force your clients to take all of the risks, then before too long, they won’t trust you.


2 replies
  1. Richard Moroney
    Richard Moroney says:

    Love this post, Charlie. The two types of risk are parallel to the two types of error in testing and measurements and may give me another way to help explain the concepts. Thanks!

    I’ll get to work on checking that punch list. My initial review suggests we can improve…

  2. Clint Fyke
    Clint Fyke says:

    My first introduction to sales training was a Zig Ziglar course. He simplified sales down to three factors, need, want and afford. His premise was that if one of them was missing then the sale would fail. The job of the salesman was to shown them the need, make them want to fulfill it and then help them figure out how to pay for it. At the time it made perfect sense. Meanwhile I have discovered that I can be missing all three factors and still buy. There have been things I didn’t need, want and couldn’t afford because they weren’t for me they were for someone else. We have all bought things we didn’t want, need or afford.

    The problem is that only principles transition across all forms of contexts as truths. I experienced the same thing with the ideas of relationships in selling, the sales agent selling themselves, the need for rapport and even trust. An example explains better. Over the years I have made trips to places like hardware stores, and miscellaneous shops looking for various sometimes obscure items. Often the clerical help on the floor have less knowledge than myself and give me totally wrong information. Despite not liking or trusting them I have bought when in the process I have found a possible solution. I bought despite them.

    Neil Rackman did extensive research into selling, particularly higher value sales. His research revealed that the larger the outlay the less the influence of the actual agent. The importance of properly vetting and evaluation of the offer supplanted the seller. Other interests placed several criteria much higher on the list and a weighted decision seldom involved the trustworthiness or other characteristics or attributes of the agent. In essence they couldn’t afford to trust anyone.

    As with anything, context determines what is deemed important and what values and standards are considered. You might implicitly trust the Dalai Lama. However, would you trust him to take the bottom while moving a piano down a flight of stairs. Trust is situational and what constitutes trust may be a matter of necessity, not some expectation of a higher ideal. People pay ransoms trusting their loved ones will be returned. Necessity makes strange bedfellows stems from just such circumstances. The logic behind the enemy of my enemy is my friend, relates to trust born of a common purpose.

    There is a tale of a farmer who had a fine horse show up in his yard. Despite his best efforts they could not locate an owner, so it became his. His neighbors were envious, saying “how lucky”. His response was “we’ll see”. His son decided to ride the beast, was thrown and broke his leg. Now the refrain from the neighbors was “how unlucky”. His response “we’ll see”. Meanwhile the army sent a squadron through the countryside looking to conscript young men into military service. The broken leg kept the son at home. The neighbors “how lucky”. The farmer “we’ll see”…

    When I come across generalizations that can’t serve as principles across all contexts my response is “sometimes”, It’s my version of “we’ll see”. If context determines the truth or validity, then “we’ll see” if it fits the current situation. You may need to trust a customer or supplier because you have no real alternatives.

    The issues raised seem to be more about managing expectations. Central to your thesis seems to be consequences. Those too are measurements, values and standards applied to situations. The issues appear to be criteria, standards, values and consequences from one context and trying to apply them in another where they don’t belong. In sports athletes do drills in practice that coaches hope translate into behaviors at game time. Players learn how to execute the drills perfectly then fail to do so in games. The failure of team members to collectively recognize a situation in a game is the challenge. The same thing happens in business when an employee decides to use an SOP, standard operating procedure, before determining if it applies. This might be a non-standard situation. Rules oriented staff can be a life saver, doing the right things the right way procedurally. But then along comes the exception, and now their everyday strength becomes a problem. They keep trying to put this square peg in the round hole. Seeing things from multiple perspectives at the same time is the skill that the context aware need to learn. Whoever is the most flexible controls the situation.


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